Espirito Santo IRS fines TelexFree R$70 million

Back in January Alessandra Marques, of the Acre Public Prosecutor’s Office, revealed in a radio interview that TelexFree was under US investigation. In a subsequent telephone conversation with Brazilian media, Marques went on to name the IRS as being involved.

At the time there was some confusion as to whether or not Marques was referring to the US IRS or the Brazilian equivalent. While it’s been confirmed that the SEC are investigating TelexFree under suspicion it’s a Ponzi scheme, whether or not the US IRS are investigating has yet to be confirmed.

What has been confirmed however is that, in addition to the SEC, the Brazilian IRS have been investigating TelexFree. That investigation recently concluded and has resulted in TelexFree being fined a whopping R$70 million ($29 million USD).

But wait for it… according to TelexFree the IRS fine is a good thing.

Appearing in the latest TelexFree news video (no. 33 for those keeping count), TelexFree co-owner Carlos Costa reveals that the IRS had been investigating TelexFree for nine months and that he’d been to their offices at least twice. Costa states that during the investigation the Espirito Santo IRS had made thirteen separate requests for documents from TelexFree.

TelexFree appear to have been fined for failing to make payments to the IRS on generated revenue. According to “article 957” of the tax code, “in the case of a lack of payment, a 75% fine (of the owed amount?) should be fined”.

According to a subsection, this fine can be increased to 150% and this is what Costa is selling to TelexFree’s affiliates. He even goes so far as to declare the fine “wonderful”:

Meanwhile why TelexFree failed to pay the IRS remains unclear. Costa does not address the issue. Instead he appears to focus on a “lack of fraud” found by the IRS.

Now forgive me if I’m wrong here, but the IRS aren’t and never were investigating TelexFree for fraud. They audited the company and fined them for failing to pay taxes on revenue generated.

The Ponzi scheme case against TelexFree in Acre is ongoing, with the IRS’ fine having no bearing on the outcome. One can expect though that any irregularities would be passed onto the Public Prosecutor’s Office however, as Alessandra Marques has already confirmed she the Office is in communication with the agency (they were aware of the IRS’ investigation long before Costa’s announcement today).

In addition to charges of TelexFree being a Ponzi scheme, Acre’s PP Office has previously aired suspicion of money laundering and embezzlement taking place within the company.

A visibly sweaty Costa goes on to make a big deal about TelexFree having aleady paid the fine, although he does not disclose where the money came from.

The full TelexFree News no.33 broadcast can be viewed below (turn on captions and then auto-translate for English subtitles):

16 Comments on “Espirito Santo IRS fines TelexFree R$70 million”

The guys at Telex Free are making those at Zeek Rewards look like rookies when it comes to the art (brashness) of spin.

The IRS fine is a good thing.
Investigation by the Attorney General is a breath of fresh air.
The SEC & FTC are fans of ours, they’re here every day.
I finally got that long needed vacation, 10 to 15 years.

Hahahahah… Carlos Costa in his own word!!! This was too big, but you can use the google translate and get a better text.. Or someone can make the translate 😀

[1] – He say we aways show all information to the peoples!!! Hahaha. a very big liar!!!

[2] – He say it is a good thing, because he say “we always pay what WE THINK we need to pay!” hahaha.. I think I just need to pay 1 dollar in taxes for my entire life!!! But because the 70 milion fine, maybe he is wrong, right?

[3] – Now the big problem, he can only change the “classe” of bussiness in the start of the year.. I google and yes, it is true, but… not “only” because this you win a fine of 70 million!! Or you change it BEFORE the year start!!! I think someone will lose their job in this week, because this “little” mistake.

The only thing “good” about this fine is that they probably didn’t hand it to the Brazilian IRS the lists of people who dumped money on TF after the shutdown.

As well as to the real number of people who came prior to the shutdown ( hence the true money that would be necessary in order to refund the masses of new investors and the inevitable discovery of lack of resources to repay the formers), which would be even more incriminating as for the ongoing investigation of Ponzi is running without that critical piece of info.

So… Did you see the dates… 11/03/2013 and 20/05/2013.. But one document they send in the start of the year was thishttp://www.youtube.com/watch?v=aCkWnRTw9t8
They paid only 12 milion and the last date to pay is 20/02/2013. I think carlos costas make a wrong calculation..

The same value!!!! 19.035.391,41!!!!! hahahah he DIDN’T PAY!!! HE IS A LAIER!!! The IRS are charging the value back!!! And he need to pay more R$ 1.697.956,91!!! It is about 1,7 milion from people money because the in fact didn’t pay at first!!! This is interest (this is the name???)

Imaginate, you buy your account by 3.000 and discovery how they are loosing money in this way!!! what will you think about???

Now I am thinking! HE REALLY PAY IT??? Is it true??? hahahah What is the true here!!!

Oz:
So 19.03 mill was the amount owed, and 1.69 mill is a fine? If I’m understanding correctly.

Costa’s BS explanation is that it was a fine or that he didn’t have to 150mil. Why is he second-guessing the IRS?

Hi Oz!! Yes!! Did you see the “Selic Acumulada” in the document? This is a taxes of 8,92%!! So, 19.03 mill * 8,92% = 20,7 mill!! Than 20,7mill – 19,03 mil = 1.69mill!! So, this increase in the number is just this taxes! And why!!

BECAUSE HE DIDN’T PAY AT FIRST!!! He is a liar!! And now he are paying with taxes!!! I really don’t understand why he didn’t pay at first and showed to everyone he did… If he show this number now, I can just imaginate that the IRS are trying to get it money back. IF he really pay it now!!!

Now the rest I will show. There are two account to pay in the last video, righ?

Because the SELIC taxes, the first generate R$ 1.697.956,91 more and the second R$ 4.565.873,98!! In total, they loose R$ 6.263.830,89 only because they didn’t pay it at first!!! The 70 milion is not a magic number!!

Now I understand why carlos costa was soo nervous to talk!!!

And.. Did he really paid it now??? Why he cry to Acre to NOT go ahead with the case?? hahahah

So long story short, TelexFree didn’t pay their taxes until now – and the IRS bent them over big time. Costa’s shitting bricks because he’s trying to sell it as a greatly reduced fine, but in reality it’s tax + a penalty.

I hate taxes so I might have misunderstood. This is more Hoss and M_Norway’s thing.

Either way I imagine the Acre PP’s will have a field day with this in court when the time comes. Thanks for trying to explain it to me :).

Obviously the question now is are their US taxes up to date and paid, or are they being dodgy there too? Apparently they missed the deadline for 1099s from what I read (I’m not too familiar with the US tax code).

Hell I’ll learn broken Spanish and Portuguese to bring you guys reports, but I draw the line at tax codes!

Oh dear, apparently there’s going to be another “pay us and we’ll explain the comp plan to you” event on April 12th in Dallas. Tickets are only $21.50 this time (lol) and i-Payout are purportedly attending.

Unfortunately my lawyer friend from Brazil said that it is indeed true that after 9 months of investigation, the gov. couldn’t prove that TF is a pyramid scheme and they will probably return to regular operations by June.

Tom:
Unfortunately my lawyer friend from Brazil said that it is indeed true that after 9 months of investigation, the gov. couldn’t prove that TF is a pyramid scheme

Why did he say that? A professional lawyer should normally know that you potentially could repeat his statement to the wrong types of people, and that you could be asked difficult questions about it that eventually would put him in a difficult situation.

IRS in Espiritos Santos has investigated TelexFree for TAXES. It CAN have been an investigation about general tax issues, e.g. missing income taxes.

Any fraudulent activity will most likely be investigated by a different agency with correct jurisdiction.

Have you really talked to a lawyer, or are you making up a story about an imaginary lawyer friend?

A real lawyer will normally give you additional information if you need it, but an imaginary one won’t. A real one will normally focus on the case itself, while an imaginary one will focus on his own role as a lawyer.

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